• The Trump administration has reversed a ban on advanced AI chip exports to China, allowing Nvidia to resume sales of its H20 and H200 GPUs.
  • Commerce Secretary Howard Lutnick described the decision as a pragmatic move to balance national security with economic competitiveness and secure critical mineral supplies.
  • The policy shift, linked to the "Busan Declaration" diplomatic truce, is expected to boost U.S. semiconductor revenues and intensify the global AI race.

In a significant policy reversal, the Trump administration has lifted its ban on the export of certain advanced AI chips to China, clearing the way for Nvidia to resume sales of its H20 inference GPU and potentially the H200 to Chinese customers. The decision, confirmed in mid-2025, follows a period of fluctuating export controls that had initially been tightened earlier in the year.

Commerce Secretary Howard Lutnick, in remarks to reporters, framed the move as a necessary recalibration. He indicated that decisions on critical technologies like Nvidia's chips will ultimately land on the President's desk, describing the approach as one of pragmatic balancing. "What we are seeing is a transition from ideological confrontation to transactional pragmatism," said one person briefed on the internal discussions, who asked not to be identified because the talks were private.

The reversal is directly tied to the "Busan Declaration," a diplomatic truce recently negotiated between former President Trump and China's Xi Jinping. As part of broader negotiations, the U.S. is seeking to secure stable supplies of critical rare earth minerals from China, a key consideration in the chip decision, according to people familiar with the matter.

For Nvidia, the resumption of sales is a crucial financial reprieve. During the ban period, the company's quarterly reports indicated that the loss of the Chinese market reduced revenues by up to 15%. The H20 GPU, while a downgraded version specifically designed for the Chinese market to comply with earlier U.S. performance thresholds, represents a significant revenue stream. A spokesperson for Nvidia did not immediately respond to a request for comment on the policy change.

The decision has immediate market consequences. Shares of U.S. semiconductor suppliers and design houses ticked higher in pre-market trading, while stocks of Chinese chipmakers like Huawei retreated. The move is expected to restore billions in potential revenue for the American semiconductor industry, which had suffered during the prohibition.

This policy shift, however, complicates Beijing's push for technological self-reliance. The Chinese government had previously banned domestic tech companies from purchasing Nvidia chips, but that ban is now expected to be relaxed, increasing competition for local alternatives like Huawei's Ascend chips. Without access to the latest Western technology, China's domestic AI development efforts would have faced significant headwinds.

Efforts to reach the Chinese Ministry of Commerce for comment were unsuccessful. The policy reversal signals a new phase of "controlled cooperation" in the tech trade, where advanced technology serves as a key bargaining chip in a wider geopolitical and economic relationship. The long-term consequences are likely to include an intensified global AI race, with both nations continuing to invest heavily in next-generation hardware.